- Municipalities and provinces can declare costs related to government tasks that they do not carry out as a VAT entrepreneur to the VAT compensation fund.
- The Supreme Court ruled that municipalities owe interest on so-called mirror corrections in the VAT, where VAT to be settled on the costs shifts from the VAT compensation fund to the VAT return or vice versa.
- The interest neutrality that municipalities invoke cannot be interpreted as meaning that no interest has to be paid at all in the case of mirror corrections.
- To avoid interest, municipalities should implement corrections in time, ensure timely tax assessment of new activities, deduct VAT when possible, pass on figures to the Tax and Customs Administration immediately, and update mixing percentages in good time.
- The interest on corrections in the VAT compensation fund for 2022 starts on July 1, 2023.
- In another procedure about interest, it was asked whether taxpayers are entitled to reimbursement of recovery interest in the event of a VAT refund.
Source BDO
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